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Civilian Works Administration

[ 23 ] November 16, 2011 |

Jason Scott Smith gives us a primer of how the federal government once created a huge number of jobs in a short time and suggests the potential for this again.

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  1. actor212 says:

    I know one thing they could do immediately that would have immediate benefit and immediate impact: send a frikkin’ army of shovelers to the Northeast and bury those power lines that keep falling in the slightest breeze.

  2. J. Otto Pohl says:

    Obama is not FDR. So the chances of this happening are very close to zero.

  3. c u n d gulag says:

    We’ll get a new CWA soon – ‘Conservatism Works Administration.’

    We’ll sell off things, and let the Job Creators (hallowed be their names) take care of the rest.

    In NY City, we can have ‘Citi Central Park,’ and ‘Duracell Battery Park.’
    Permanent jobs created – collectors of admission fees, people to hang advertizements from trees, and the paving of lawns to save money on mowing costs.
    Additional temporary jobs – paint the cement lawns green, when needed (see Queens homes to see how this is done).

    The major North-South road along the Eastern Seaboard could be sold an renamed “Formula 409 Rt. 95.”

    The jobs would come from building and manning toll booths, and billboard construction along every 100 yards of road.

    And more!
    You know how creative the FREE markets can be – as long as they can CHARGE for something!

  4. I’ve actually run the numbers on direct job creation a number of times on my blog, and it’s pretty amazing how efficient direct job creation is compared to other forms of stimulus – according to my numbers (which I’ve checked with a number of economists), it costs about $35-40 billion to put a million people to work for a year.

    Which means that you could hire the entirety of the officially unemployed for $560 billion, or 71% of the cost of the original 2009 stimulus – and you don’t really need to do that. The New Deal’s direct job creation programs accounted for about 1/2 of new jobs from 1933-1937 (when unemployment dropped from 25% to 9%), as CWA and WPA workers spent their paychecks and the multiplier effect take hold.

    Shows the power of conventional wisdom even on the left considering how far out DJC was in 2009.

    • wengler says:

      But where’s the profit in that?

      Rich people gotta eat!

    • mpowell says:

      The one issue here is that you have to figure the crowding out factor on the available employee side. You are assuming that if the government hires 5M new employees the workforce will expand by that much. But they can also be workers hired out of private sector jobs who are not replaced (jobs can be sticky – a company doesn’t fire anyone but also doesn’t hire or replace departures during tough times). I’m not sure how big of a problem this would really be, but Cowen at MR has made a big deal out of it recently. Not that I would trust the conservative economists, but they do have a point.

      • StevenAttewell says:

        1. In a recession, crowding out doesn’t happen because workers don’t want to lose their jobs.
        2. The multiplier effect from increased wages counteracts any effect.
        3. As a result, empirical studies have shown an almost negligible effect.

  5. FYI, apparently Yglesias doesn’t like the idea:

    You’re not going to hire a mass army of cheap government lawyers as a public works project. The idea would be to hire large quantities of relatively low-skill workers, people in the categories that currently have high unemployment rates, and put them to work doing something. Now we have a question. What do we pay them? If we pay them less than current public employees make, then current public employees and their unions are going to be very upset — it’s union-busting disguised as work-relief. But if we pay them the union premium wages that low-skill government workers get, then we’re going to have a different set of problems. If we target the program exclusively at the currently jobless, then currently employed people are going to think it’s unfair for their tax dollars to be supporting premium wages. But if we don’t narrowly target the program, then people are going to quit private sector jobs and go take work-relief jobs. Whether you think that’s a good outcome or not, what you’re talking about under that scenario is a quasi-permanent increase in the size of the public sector that needs to be paid for with higher taxes, not an emergency economic relief effort that can be responsibly financed through pure borrowing.

    What’s more, the whole thing is largely unnecessary. Since we already have a lot of people working in the public sector, and since state and local governments are constrained by balanced budget requirements, you can simply have the federal government borrow money to give to states and localities in order to avoid layoffs. This is a big part of the administration’s American Jobs Act, and it’s both easier to implement and less politically problematic than trying to launch a brand new public works program.

    This is completely wacko.

    1. Public employee unions have backed direct job creation for a long time, and are aware that they wouldn’t be working at permanent worker salaries. It’s very easy to design these projects to be non-competing with current activities, and given the decline in state employment that’s currently ongoing, it’s not like there’s a huge expressed demand for public workers that would be siphoned off.
    2. “people are going to quit private sector jobs and go take work-relief jobs” is highly unlikely given the extreme insecurity that people have about their jobs – the New Deal’s job programs didn’t lead to people leaving private sector work, despite repeated fears that this would happen.
    3. There’s a limit to direct aid to states – there’s no guarantee that the states won’t swallow the money and cut jobs anyway, you can only reach a maximum of a half-million public sector workers who’ve lost their jobs since 2009, and it’s a lot more expensive per job than DJC.

    • actor212 says:

      Pay them a living wage. Call them “apprentices” or “interns” if it will help the unions swallow it.

      Somehow, I doubt they’d have a problem with an influx of workers to do work that might take them decades to get around to, mostly because it means their immediate jobs are guaranteed for as long as this project goes on. After all, if the alternative is for the state or city to, you know, defer maintenance, that means current jobs are threatened.

    • wengler says:

      I like it when someone who writes for a living talks about ‘low-skill’ labor like construction.

      I would value someone building a public park or finishing my basement more than a new post every 45 minutes.

    • mpowell says:

      Well he is absolutely correct about one thing: it is insane that states are going through massive rounds of layoffs at the moment. The first thing the federal gov should have done is step and deliver and on-going stimulus to the states structured to discourage laying people off (so Republican governors can’t just fire people and then cut taxes for their rich constituents).

  6. cpinva says:

    in fairness to obama, even if he were to propose this, the republican led house would never agree to fund it. that said, from a strictly political perspective, it would be a killer issue for the dems to attack republican incumbents with (who most assuredely would vote against it) in 2012.

    for those two reasons, it will never reach the proposal stage.

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